Imagine this, you have just commenced a new job & the HR manager is going through some of the benefits that you’re entitled to as an employee.

They mention that they have an unlimited sick leave policy. This means that you will be paid for any illness or injury that prevents you from doing your job for the full duration of your disability!

To my knowledge this kind of arrangement doesn’t exist, unless there are special circumstances or privileges involved.

Ordinarily, employees need to accrue sick leave entitlements based on the number of years of service offered.

It has been found that the average number of sick days an employee has in Australia is approximately 15-20. This number would be higher if it weren’t for our love of ‘sickies’ in this country however it is what it is.

So if you were to sprain your ankle or pick up a common cold or flu, you would have adequate sick leave entitlements to cover you.

What would happen financially though if your illness or injury were to last months or even years!

We are all familiar with the term “less is more”. Sometimes in life we tend to over complicate things.

I know from my experiences with the people that I come across in the industry, personal insurance can be a little overwhelming.

This may be due to the number of different products available on the market, each with their own options. As advisers sometimes we tend to focus a little too much on features & benefits rather than the purpose of the cover!

Without an income not only are we unable to meet our financial commitments but we are also unable to maintain our standard of living!

Therefore the secret to financial security is to insure your income over the short, medium & long term!

There are two important areas that need to be considered. Temporary income replacement due to serious illness or injury & permanent income replacement due to premature death or permanent disability.

We have all seen movies on TV where there are two different endings to a story. It is usually a family ghost or an angel from heaven that has been sent to show a person the consequences of their decisions in life!

There is a happy ending & a not so happy ending with the person having a second chance to go back & make things right.

This of course is make believe as in real life we sometimes only get one chance to get things right. For some people they don’t even get this chance as an unexpected event occurs which leads to grief.

This is particularly true in relation to life insurance!

Here are two stories outlining a family scenario below, highlighting the financial impact both with & without adequate Life insurance cover!

As they also say in the movies, “the following story is based on true events”.

Medically speaking, we are extremely fortunate to be living in today’s world!

If we go back a couple of generations, not only were people dying earlier but mortality rates were considerably higher.

Today life expectancy has increased significantly thanks to advances in both medical treatment & technology. This trend will no doubt continue over the years further improving our longevity.

The life insurance industry has also evolved over the last few years particularly in relation to the types of cover available on the market.

These changes have reflected or mirrored the trends discussed above relating to life expectancy & mortality. The concept of life insurance has been around for well over a century.

Back in those days a life insurance policy was your only choice in relation to financial protection. If you were an adult living in those times you would be fortunate to live to the ripe old age of 50!

This was due to the fact that even the most simplest of illnesses could lead to death, reflecting the standard of medical treatment available at that time.

If I had a dollar for each time the words ‘I don’t need personal insurance’ were mentioned, I would be relaxing on a tropical beach right now instead of writing this blog.

What scares me the most is that these words are coming from people who are financially responsible for their family or business!

It’s vital that we don’t associate a lack of enthusiasm or need for insurance with a genuine belief that it isn’t necessary! The majority of the people that I come across as an adviser are educated & intelligent.

Even so, I find myself having to paint a picture of what can go wrong in order to convince them of the benefits of personal insurance.

Here’s an example. Mr Smith, “I take it your income or ability to earn an income is important to you right now?” “Well yes, I need my income in order to pay our bills & go on holiday each year”.

Mr Smith, “If you got hit by a bus tomorrow what would the financial impact be on your wife & children?” “Well … am … I haven’t really thought about it”.

“Mrs Smith doesn’t work so I guess she would have to move in with her parents as the home would have to be sold. Our parents may also have to look after the children as I assume my wife would have to look for a job!”